Coronavirus could send 10-year Treasury yield crashing below 1% — Here’s how

House made of paper money on top of pile of coins

Source: Yahoo Finance

Brian Sozzi; Editor-at-Large; Yahoo Finance

And you thought the record-low yield on the 10-year Treasury note couldn’t go any lower thanks to rising investor fear of a coronavirus pandemic.
Silly, silly.

Wells Fargo Investment Institute president Darrell Cronk said on Yahoo Finance’s The First Trade yields on the 10-year could reach 1% sooner rather than later if uncertainties on coronavirus ratchet up. In fact, Cronk’s 12-month model suggests if the coronavirus sends the U.S. into recession, the 10-year Treasury yield could nosedive to 0.4%.

Most at risk from the sharp decline in yields are financials like JPMorgan, experts say, as they will earn less on loans in such a low rate environment. While one would think the housing sector benefits from lower rates on the 10-year, BUT even that is no surefire bet if consumer confidence takes a hit from the coronavirus and people put off homebuying this spring.

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Categories: Banking

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